Mold-Tek Packaging Ltd.

Porter 5’s Forces analysis:

Threats of New Entrants

New entrants in Packaging & Containers brings innovation, new ways of doing things and put
pressure on Mold-Tek Packaging through lower pricing strategy, reducing costs, and providing new
value propositions to the customers. Mold-Tek Packaging has to manage all these challenges and
build effective barriers to safeguard its competitive edge.

How Mold-Tek Packaging can tackle the Threats of New Entrants?

By innovating new products and services. New products not only bring new customers to the fold
but also give old customer a reason to buy Packaging Corporation of America ‘s products.

By building economies of scale so that it can lower the fixed cost per unit.

Building capacities and spending money on research and development. New entrants are less likely
to enter a dynamic industry where the established players such as Mold-Tek Packaging keep defining
the standards regularly. It significantly reduces the window of extraordinary profits for the new firms
thus discourage new players in the industry.

Bargaining Power of Suppliers

All most all the companies in the Packaging & Containers industry buy their raw material from
numerous suppliers. Suppliers in dominant position can decrease the margins Mold-Tek Packaging
can earn in the market. Powerful suppliers in Consumer Goods sector use their negotiating power to
extract higher prices from the firms in Packaging & Containers field. The overall impact of higher
supplier bargaining power is that it lowers the overall profitability of Packaging & Containers.

How Mold-Tek Packaging can tackle Bargaining Power of the Suppliers?

By building efficient supply chain with multiple suppliers.

By experimenting with product designs using different materials so that if the prices go up of one
raw material then company can shift to another.

Developing dedicated suppliers whose business depends upon the firm. One of the lessons Mold-Tek
Packaging can learn from Wal-Mart and Nike is how these companies developed third party
manufacturers whose business solely depends on them thus creating a scenario where these third-
party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.

Bargaining Power of Buyers

Buyers are often a demanding lot. They want to buy the best offerings available by paying the
minimum price as possible. This put pressure on Mold-Tek Packaging profitability in the long run.
The smaller and more powerful the customer base is of Mold-Tek Packaging the higher the
bargaining power of the customers and higher their ability to seek increasing discounts and offers.
How Mold-Tek Packaging can tackle the Bargaining Power of Buyers?

By building a large base of customers. This will be helpful in two ways. It will reduce the bargaining
power of the buyers plus it will provide an opportunity to the firm to streamline its sales and
production process.

By rapidly innovating new products. Customers often seek discounts and offerings on established
products so if Mold-Tek Packaging keep on coming up with new products then it can limit the
bargaining power of buyers.

New products will also reduce the defection of existing customers of Mold-Tek Packaging to its
competitors.

Threats of Substitute Products

When a new product or service meets a similar customer needs in different ways, industry
profitability suffers. For example, services like Dropbox and Google Drive are substitute to storage
hardware drives. The threat of a substitute product or service is high if it offers a value proposition
that is uniquely different from present offerings of the industry.

How Mold-Tek Packaging can tackle the Treat of Substitute Products?

By being service oriented rather than just product oriented.

By understanding the core need of the customer rather than what the customer is buying.

By increasing the switching cost for the customers.

Rivalry among the Existing Competitors

If the rivalry among the existing players in an industry is intense then it will drive down prices and
decrease the overall profitability of the industry. Mold-Tek Packaging operates in a very competitive
Packaging & Containers industry. This competition does take toll on the overall long-term
profitability of the organization.

How Mold-Tek Packaging can tackle Intense Rivalry among the Existing Competitors in Packaging &
Containers industry

By building a sustainable differentiation

By building scale so that it can compete better

Collaborating with competitors to increase the market size rather than just competing for small
market.

Implications of Porter Five Forces on Mold-Tek Packaging:

By analyzing all the five competitive forces Mold-Tek Packaging strategists can gain a complete
picture of what impacts the profitability of the organization in Packaging & Containers industry. They
can identify game changing trends early on and can swiftly respond to exploit the emerging
opportunity. By understanding the Porter Five Forces in great detail Mold-Tek Packaging managers
can shape those forces in their favor.
Market Structure:
Perfect Competition

Mold-Tek market is said to be Perfectly Competitive because it satisfies the following features: -

(i) Large number of buyers and sellers: Under perfect competition

(ii) As a result, a single firm cannot influence the market price so that a firm under perfect
competition is a price taker and not a price maker. Similarly, there are a large number of
buyers and an individual buyer buys only a small portion of the total output available.
(iii) Homogenous goods: Under perfect competition all firms sell homogenous goods which
are identical. So, the products are perfect substitutes of each other.

Due to huge competition in current market for sustaining in market, Mold-Tek change their market
from Price-Maker to Price-Leader.

Current Competitors:
1) Avon Moldplast Ltd.
2) Arrow Greentech Ltd.
3) AVSL Industries Ltd.
4) Axel Polymers Ltd.
5) Biopac India Corporation Ltd.
6) Brand Concepts Ltd.
7) Bright Brothers Ltd.
8) Deep Polymers Ltd.
9) Dhunseri Ventures Ltd.
10) Fenoplast Ltd.
11) Fiberweb (India) Ltd.
12) Gothi Plascon (India) Ltd.
13) Infra Industries Ltd.
14) Innovative Tech Pack Ltd.
15) Jasch Industries Ltd.
16) KG Petrochem Ltd.
17) Kingfa Science & Technology (India) Ltd.
18) Kkalpana lndustries (India) Ltd.
19) Kkalpana Plastick Ltd.
20) Kunststoffe Industries Ltd.
21) Machino Plastics Ltd.
22) Mayur Uniquoters Ltd.
23) Milestone Furniture Ltd.
24) Mitsu Chem Plast Ltd.
25) Multibase India Ltd.
26) National Plastic Industries Ltd.
27) National Plastic Technologies Ltd.
28) Nilkamal Ltd.
29) Noble Polymers Ltd.
30) OK Play India Ltd.
31) Omfurn India Ltd.
32) Parin Furniture Ltd.
 33) Pearl Polymers Ltd.
34) Pil Italica Lifestyle Ltd.
35) Plastiblends India Ltd.
36) Polymac Thermoformers Ltd.
37) Precision Containeurs Ltd.
38) Prima Plastics Ltd.
39) Responsive Industries Ltd.
40) Roni Households Ltd.
41) Shaily Engineering Plastics Ltd.
42) Sintex Plastics Technology Ltd.
43) Supreme Industries Ltd.
44) Tirupati Foam Ltd.
45) TPL Plastech Ltd.
46) Tulsi Extrusions Ltd.
47) Wim Plast Ltd.

Clients:
• Leading Lubricant, Paint, Food & FMCG firms

• Blue chip clientele includes – Castrol, British Petroleum, Exxon Mobil, Shell, Valvoline,
Petronas, Asian Paints, Kansai Nerolac Paints, Akzonobel, Cadbury, Heinz, Hindustan
Unilever

• Foreign exports to UAE, Singapore, Malaysia, Nepal and Bangladesh

Sales Force Structure:

Mold-Tek is a monopoly supplier to Castrol/BP and Cadbury Lickables for almost 3 decades

Recently, Mold-Tek bagged prestigious contracts of Shell & Exxon Mobil for 5 years of exclusive
supply